This page relates to the 2021-24 National Land Transport Programme.


Waka Kotahi NZ Transport Agency's policy regarding funding assistance rates for investments from the National Land Transport Fund.

Date of issue: February 2021 Investment policies will be reviewed every three years or when a new Government Policy Statement on land transport is released.


The purpose of this section is to explain the principles and framework behind the Waka Kotahi funding assistance rates (FARs) for co-investment from the National Land Transport Fund (NLTF) and describe the methodology for determining approved organisations’ normal FAR. It also defines the criteria for adjustments and front-loading of FARs and addresses the situations where we (Waka Kotahi as investor) may agree to targeted enhanced FARs.

Definition of terms

Funding assistance rates (FARs) are the contribution, in percentage terms, that we make from the NLTF to approved organisations for the delivery of an activity or combination of activities. FARs are not subsidies, but part of a co-investment system which recognises there are both national and local benefits from investing in the land transport network.

Local share is the percentage of the funding for an activity that is provided by an approved organisation to balance funding by us.

Policy statement

Under section 20C of the Land Transport Management Act 2003, Waka Kotahi is required to set the rate of funding assistance from the NLTF.

Section 20C of the Land Transport Management Act 2003(external link)

The FAR system enables:

  • approved organisations and us to co-invest to achieve:
    • optimal national land transport outcomes within their combined financial resources
    • an integrated and appropriately consistent land transport system throughout the country
  • appropriate sharing of the costs of the land transport network and transport services between land transport system users and local communities, recognising that both national and local benefits are derived from investment in the network and services.

We set FARs for each NLTP period.

Types of FAR

The types of FAR are:

  • The normal FAR is set for each approved organisation for each NLTP, following a consistent methodology (see ‘Setting normal FARs’ below).
  • We may approve variations to normal FARs for specific purposes or specific approved organisations (see section ‘Variations to normal FARs’ below)
  • Normal FARs can be temporarily adjusted or front-loaded in exceptional circumstances that fit specified criteria (see ‘Adjustment and front-loading’ below).
  • Targeted enhanced FARs (TEFARs) can be considered in exceptional circumstances and where there would be a clear benefit. (See ‘Targeted enhanced funding assistance rates’ below).

FARs applied across financial years

Our funding approvals for the activities of approved organisations are based on the application of the approved normal FAR for each year of the activity. Where an approved activity phase extends over more than one financial year, the approved normal FAR for the subsequent year(s) shall be applied to the costs incurred/claimed in the subsequent year(s). This also applies where an approved activity phase extends beyond the NLTP period.

 FAR principles and framework


The principles that underlie the FAR framework are that it should:

  1. support optimal national land transport outcomes to be achieved in the right way, at the right time and for the right cost
  2. provide users with an integrated and appropriately consistent network throughout the country
  3. appropriately share the costs of the land transport network between system users and local communities, recognising that each of these groups affects the network and gains benefits from it
  4. provide approved organisations and us with as much investment certainty as practicable
  5. be efficient to apply
  6. be based on readily accessible and reliable evidence and data
  7. ensure that any variations are identified and applied transparently.

Funding assistance rate framework

Diagram of the FAR framework:

Setting normal FARs

The Waka Kotahi methodology for determining normal FARs was developed in consultation with approved organisations and the transport sector. It takes into account factors that could affect delivery, and is robust, repeatable, stable and objective.

A year before the start of each NLTP, we recalculate the normal FAR for each approved organisation by inputting the latest available information. The changes in FARs, if any, will reflect movements in centreline kilometres, capital values, rating units and the index of deprivation.

Parameters for normal FARs

The parameters for normal FARs are:

  • The overall rate at which we will co-invest is set at 53%. This means that across the whole programme, the NLTF will fund an average of 53% of local transport programmes.
  • The maximum normal FAR is set at 75% for approved organisations on mainland New Zealand, and at 88% for the Chatham Islands Council to reflect the council’s higher costs associated with delivering land transport activities. The rate also reflects the co-investment nature of land transport funding and the sharing of costs and risks in the investment.
  • The minimum normal FAR is set at 51%.
  • The difference between the minimum normal FAR (51%) and the overall co-investment rate (53%) allows for funds to be distributed to those approved organisations that would have difficulty raising their local share.


Inputs for each approved organisation are:

  1. centreline kilometres, which provide a measure of the length of the road network to be maintained and services to be available to all transport users
  2. capital value, which is used by most local authorities to set rates, and provides a measure of the asset base from which local authorities raise their local share
  3. inverse of rating units, which identifies local authorities that have the smallest number of ratepayers from which to source their local share
  4. index of deprivation, a demographic index published by the University of Otago and used by the Ministry of Health, which provides a measure of the relative wealth of communities
  5. total cost of all activities for a recent period, which is the actual total costs incurred by approved organisations for the last three to five years.

Steps for setting FAR rates

The Waka Kotahi methodology for setting the FAR rates for each approved organisation is:

  1. Gather, collate and calculate inputs using the latest available data.
  2. Standardise each of the inputs to a comparable scale based on the mean and standard deviation.
  3. Add the standardised inputs together to establish a score for each approved organisation.
  4. Multiply each approved organisation's score by a common factor (the multiplying factor) to determine an interim FAR.
  5. Starting from the highest interim FAR, allocate the NLTF contribution to approved organisations’ NLTP programmes and progress down, taking into account the maximum and minimum normal FARs.
  6. Iteratively fine-tune the multiplying factor until the overall total is balanced to a weighted average of 53% overall co-investment rate.

The resulting FARs are the normal FARs for approved organisations.

Diagram of steps

Diagram of steps for setting FAR rates:

FAR adjustment and front-loading

In special circumstances we may agree to FAR adjustment or front-loading arrangements with approved organisations.

FAR adjustment

FAR adjustment is where the approved organisation agrees to deliver an activity at a lower-than-normal FAR initially and then we co-invest at a higher FAR later on. This arrangement may be triggered by a shortfall in NLTF cash-flow, for example, due to revenue being lower than forecast, or it may arise from an approved organisation's desire to deliver an activity at a faster rate than we can fund from the NLTF.


Front-loading is where we agree to co-invest in an activity at a higher-than-normal FAR initially and then the approved organisation accepts a lower-than-normal FAR later on. The trigger for the arrangement may be the inability of the approved organisation to raise sufficient local share in the short term to deliver an activity in a time frame that it and we consider desirable.

Criteria for FAR adjustment and front-loading

The following criteria must be met before we consider agreeing to either a FAR adjustment or front-loading arrangement:

  • There must be benefits to the land transport system from delivering the activity's outcomes in the desired time frame as against delivering them over a longer time frame (evidence should be in the form of an incremental assessment against the Waka Kotahi Investment Prioritisation Method).
  • There must be evidence of genuine difficulty in raising local share or funds from the NLTF in the short term. The reasons for the impairment could include, for example:
    • significantly lower local or NLTF revenue than forecast, requiring a pullback in expenditure
    • the relevant organisation is at the limit of its approved revenue/funding policy or ability to raise or draw down debt, so cannot fund the activity within the desired time frame
    • competing priorities also being delivered by the organisation restrict its ability to fund its share.
  • There must be both a commitment and an ability by the approved organisation or us to raise the funds to pay its higher share within an agreed cash-flow plan.
  • The arrangement must not exceed 10 years.
  • The impact on the overall FAR must be neutral, that is it does not constitute a loan and the overall FAR under the arrangement is no different from what it would be if delivered without the arrangement.
  • A formal agreement must be contracted between the parties, including the remedies that may be sought in the event of default by either party.

Targeted enhanced funding assistance rates (TEFARs)

TEFARs are time-limited, specified FARs that are higher than normal and are applied in exceptional circumstances and time-limited periods to either:

  • facilitate an activity that is particularly important from a national land transport perspective, where it is highly likely that it would not be able to proceed within an appropriate time frame if additional funding assistance was not provided, or
  • give a kick-start to encourage and enable an approved organisation to make a tactical step change that supports delivery of the government’s transport priorities in an optimal way.
    Any TEFAR will have a predetermined end date. The enhanced rate can only continue after that date if there is clear justification that is consistent with the original criteria and it is agreed to in writing by Waka Kotahi.

Criteria for considering use of a TEFAR

We apply the following criteria when considering the use of a TEFAR:

  • The outcomes intended to be achieved by the proposed TEFAR align with the results identified in the current Government Policy Statement on land transport (GPS).
  • The intended outcomes address an exceptional, unforeseen and immediate need that will deliver the Waka Kotahi priorities as a step change ahead of normal funding capability in the short term.
  • Use of the TEFAR achieves value for money when assessed incrementally under the Waka Kotahi Investment Prioritisation Method.
    2021-24 Investment Prioritisation Method
  • The approved organisation will be able to deliver the outcomes sought from the application of the TEFAR.
  • There is sufficient headroom within the GPS funding range for the relevant activity class and sufficient funding in the NLTF to enable funding to be made available for use of the TEFAR.
  • There is evidence that the approved organisation would have material difficulty in funding the local share of the costs of the activity within an appropriate time frame through application of normal FARs.
  • The approved organisation has sufficient capability to use the TEFAR to achieve the intended outcomes or can be provided with sufficient guidance to do so.
  • The approved organisation will be able to find the necessary local share to maintain the new or improved infrastructure or level of service the targeted rate would be seeking to achieve once the TEFAR ceases.
  • The outcomes predicted to be achieved by the TEFAR can be clearly identified and monitored.

Setting the TEFARs

TEFARs are set on a case-by-case basis and are not a precedent for subsequent proposals. Factors Waka Kotahi takes into account when setting a TEFAR include but are not limited to:

  • It should be set so that the investment of additional NLTF funds to support the enhanced rate achieves value for money when assessed incrementally under the Waka Kotahi Investment Prioritisation Method.
    2021-24 Investment Prioritisation Method
  • It should be positioned sufficiently above the normal FAR of the relevant approved organisation to incentivise delivery of targeted outcomes in the specified time frame.
  • It should reflect our requirement to achieve value for money, and it should be sufficient for the purpose without being generous.
  • It should ensure that the approved organisation continues to have a reasonable share of the ownership and risk in the costs of delivering their activities.

Application for a TEFAR

Before we will consider any proposal to use a TEFAR, the approved organisation must develop and submit an application that includes the following:

  1. Where we have set specific TEFAR criteria and there is a predetermined outcome and/or type of activity for which we have approved the use of a TEFAR, the application must:
    1. clearly demonstrate how it delivers against the eligibility criteria published by us.
  2. Where we have not set specific TEFAR criteria, the application must:
    1. set out the purpose of the proposal and its intended outcomes
    2. describe the options considered, the preferred option and the process undertaken to select the preferred option
    3. demonstrate how well each of the criteria for a TEFAR is met
    4. provide evidence that the proposal represents value for money and the guidance above for setting the rate has been taken into account.

Engagement and review

We will:

  • consider whether to carry out general or targeted engagement before deciding to use a TEFAR, and
  • complete a review of each application for a TEFAR to gauge its success and help improve policy and guidance.

Variations to normal FARs

Variations to normal FARs for the 2021–24 NLTP will apply as follows:

  1. Special purpose roads:
    The FARs for special purpose roads (SPRs) that have yet to transition to the approved organisation’s normal FAR are set out in the table of published FAR rates.
    Other funding assistance rates
    All SPRs are to transition to the approved organisation’s normal FAR by the start of the 2024–27 NLTP. During the 2021–24 NLTP Waka Kotahi will continue to engage with relevant approved organisations to confirm the transition arrangements.
  2. Total Mobility activities
    Refer to the other FAR tables for Total Mobility FARs that apply for the 2021–24 NLTP.
    Other funding assistance rates
  3. Emergency works
    The Waka Kotahi emergency works policy was revised as part of the 2014 FAR review. Details of the emergency works policy are included in the detailed funding criteria set out under work category 141.
    Work category 141: Emergency works

Further information

2021-24 NLTP funding assistance rates